Who’s Going to Pay? Before and After the Affordable Care Act

There’s nothing like getting current, though it’s hard to do when you write for a monthly. Still, in this cover story I wrote for the March 2017 issue of The Reader (http://www.thereader.com) I think I mostly managed to stay relevant to the topic of health care coverage in America, the forces pushing and pulling for and against the Affordable Care Act and what the ACA has meant in terms of gains and what its repeal and replacement would mean in losses. For the piece I spoke to local professionals on the provider and insurer sides of the equation for their take on how we got here and where we might be heading. The story went to press with us knowing Congress was working to repeal and replace Obamacare, though no one knew what that entailed, and then just about the time our story got published that plan was unveiled. As you know by now, the proposed new plan was met with disdain from all quarters, especially consumer rights groups and elected officials, even conservative Republicans, who heard loud and clear from constituents that they they oppose the called for cuts that would cause many people to lose insurance. As the push back continues, town halls and debates ensue, and presumably negotiations, revisions and compromises will get made. Meanwhile, America still can’t get its health care system to work equitably and efficiently.

One accident, one illness could be catastrophic. Not just medically, but also financially.

Families stood to lose almost everything in medical bankruptcies when health insurance companies rejected those with pre-existing conditions and capped their policies with lifetime limits.

Uncovered costs helped health care expenditures soar, more than tripling in the last 20 years according to the federal National Health Spending Report. In 2015, the federal government was the largest payer of health care, covering 37% of the total cost through its two programs Medicaid and Medicare.

The curve was starting to bend.

According to the Kaiser Family Foundation, health insurance costs increased 63% from 2001 to 2006 and 31% from 2006 to 2011. That number dropped to 20% from 2011 to 2016.

Part of the reason was the Affordable Care Act and a landmark shift in how health care was being offered. Through a series of tax increases targeting high-income earners, the ACA was able to fund experiments in in- novation while subsidizing the cost of bringing almost 30 million Americans into the health insurance system.

With the end of Obamacare at the top of the national conversation, The Reader talked to the major stakeholders about life before and potentially after the Affordable Care Act.

It’s not just the $2 billion in federal revenues Nebraska passed up for health insurance, or the 275,000 Nebraskans with pre-existing conditions that could be denied health insurance, according to the Kaiser Family Foundation. It’s not even the estimated 165,000 Nebraskans that would lose health insurance, an increase of 111% of the uninsured, according to the Economic Policy Institute, leading to almost 3,000 jobs lost and $400 million in federal health care dollars gone that we subsidize.

It’s also about the way we take care of each other.

Quality of Health Care Over Quantity

America treating healthcare as a commodity helps explain its high delivery and coverage expense. Characterized by historic lack of incentives to drive prices down, providers and insurers dictate terms to consumers. Subsidies to assist low income patients who can’t pay out of pocket get passed along to other consumers. But affording care and its coverage is a burden even for the middle classes.

Amid runaway costs and coverage gaps, America’s clunkily moving from a volume to a value-based system as part of long overdue healthcare reform. The Affordable Care Act was passed in 2010 after contentious bipartisan debate. The statute’s full roll-out began in 2014.

The calculus of people not being able to afford care translates into real life implications. Untreated chronic diseases worsen without treatment. Early diagnoses are missed absent annual physicals or wellness checks.

Championed by President Barack Obama, who promised reform in his campaign, the ACA’s enacted consumer protections and mea- sures holding providers account- able for delivering value.

Nebraska Methodist Health System CFO Jeff Francis said organizations like his have “con- tracts and monies at risk for hit- ting certain quality items, not just with Medicare, but with some of our commercial insurers as well, Five or ten years from now,” he added, “we’ll probably have more at risk financially from a quality and outcome standpoint. Recent federal legislation changed the way physicians get paid by CMS (Centers for Medicare and Medicaid Services). Starting in 2019 they’re having potential penalties depending on whether they’re hitting certain quality metrics or not.”

He said the stick of such punitive measures works.

A new Standard in American Health Care

Aspects of Obamacare, such as the individual mandate and public health exchanges, have detractors. Federal lawsuits challenging it have failed. But its intact survival is in jeopardy today. A chief critic is President Donald Trump, who with the Republican controlled Congress vowed to repeal and replace, though that’s proving more daunting in reality than rhetoric. On February 16, GOP leaders shared a replacement plan with tax credits for buy- ing insurance and incentives for opening healthcare savings accounts, but no details for funding the plan or its projected impact on the insured and uninsured.

Debehnke said, “I don’t think there’s any question, regardless of where you land politically, there are components of the current ACA that require tweaking. Even Democrats will tell you it wasn’t exactly perfect – nobody said it was going to be perfect. It was understood there were going to need to be changes as things move along.”

There’s widespread consensus about the benefits accruing from the ACA. New subsidies allowed millions more people nationwide and tens of thousands more in Nebraska to be insured, in some cases getting care they deferred or delayed. Insurers cannot deny coverage for pre- existing conditions or cancel coverage when someone gets sick. Plans must cover essential care and wellness visits. Adult children can remain on their parents’ insurance until age 26.

Francis said, “A lot of good things have come out of this. We’re focusing on well- ness, we have fewer uninsured, we’re having better outcomes for patients. I think there’s satisfaction with the improvements. I just think there’s disagreement with how it’s occurring or being done.”

“You can’t believe the difference it’s made by setting minimum standards for health insurance,” said One World Community Health Chief Medical Officer Kristine McVea, “so that things like child immunizations and mammograms are covered.”

Since the ACA’s adoption, uninsured 18-to 24-year-olds in Nebraska dropped from 25.5 percent in 2009 to 12.4 percent in 2015, according to the Kids Count in Nebraska Report.

McVea said, “At One World people get assistance in enrolling for health insurance. Counselors guide them through the market- place. People are really becoming more savvy shoppers. Improved health literacy has been a result of this process, you can really compare for the very first time apples to apples in terms of different plans. That has been a tremendous boon to clients.”

Not everyone included – Nebraska drops the Kick- back

Healthcare disparities still exist though. In Omaha 24% of adults living below the poverty line

lack health coverage while 3% of adults with medium to high in- come are uninsured. Some 36% of Hispanic adults, 15% of black adults and 5% of white adults are uninsured in the metro, ac- cording to numbers reported by The landscape, a project of the Omaha Community Foundation.

McVea said, “The poorest of the poor are not eligible for the marketplace at all because that part of the Affordable Care Act carved them out thinking states would cover them with Medicaid. Well, Nebraska’s elected not to expand Medicaid, so there’s this whole gap of people not insured. Then there’s prob- ably another tier who do get assistance through the marketplace, but considering the economic pressures they’re under, even with the assistance, it still falls outside their reach to get good healthcare.”

The Kids Count Report found 64 percent of uninsured Nebraska children are low-in- come — likely eligible for but not enrolled in Medicaid or Children’s Health Insurance program (CHIP).

Past Nebraska Medical Association president Rowen Zettermen said, “In Nebraska we have somewhere in the neighborhood of 60,000 to 90,000 uninsured people that would have otherwise been eligible for Medicaid expansion. you find the highest percentage uninsured rates in rural counties. We still have 20 some million uninsured in this country. A number may have insurance but they’re underinsured for their various conditions. Ideally, everybody should be able to establish a healthcare proposition with their physician, nurse practitioner or physician’s assistant to access care whenever they need it.”

Then there are federal DSH monies to fund Medicaid expansion the state foregoes because the legislature’s voted against expansion. Gov. Pete Ricketts opposes it

as well. Disproportionate Share Hospital payments are subsidies paid by the federal government to hospitals serving a high percentage of uninsured patients. Nebraska hospitals write off uncompensated care cost while getting no money back for it.

Zetterman said, “We could expand Medic- aid and take advantage of the roughly $2 to $2.5 billion that’s failed to come into the state. It would have paid salaries for more people in physicians offices and a variety of things that would be taxed and bring in more revenue.”

DeBehnke of Nebraska Medicine said, “Being a large hospital health system that takes all comers, we have a Medicaid percentage of our business. We would be better off in a Medicaid expanded state. We would like to see more coverage for the working poor. That’s what Medicaid expansion is – providing coverage to the working poor. Those who don’t currently qualify for it would under an expansion.”

Proposed federal community block grants could expand coverage. DeBehnke cautioned, “We just have to be sure there’s good control around how those dollars are used and they actually go for healthcare coverage. Expanding coverage to all people is really the key.”

Nebraska State Senator Adam Morfield is the sponsor of lB 441, which would expand Medicaid in Nebraska. The bill is scheduled for a March 8 Health and Human Services Committee hearing.

The care-coverage-income gap may be more widespread than thought. Kids Count Report findings estimate 18.5 percent of Nebraskans are one emergency away from financial crisis.

Preventative Care is Long-Term Savings

Having coverage when you need it is a relief. Insurance also motivates people to get check-ups that can catch things before they turn crisis.

“A woman having symptoms for some time didn’t have any insurance and she waited

before she sought care,” McVea said. “By the time she came to us for diagnosis she already had a fairly advanced stage of colon cancer. She’s undergone chemo- therapy and surgery and is now living with a colostomy. That didn’t have to happen. We see things like that every day – people who’ve let their diabetes and other things go to where they have coronary artery dis- ease, and that’s not reversible. We’re trying to get them back to the path of health with treatments, but they’ve lost that opportunity to maintain a high quality of health.”

Zetterman said, “There’s good data to show patients with cancer who don’t have insurance tend to arrive with more advanced disease at the time of initial discovery because they come late to seek care.”

That pent-up need is expressed more often, McVea said, as “people have insurance for the first time or for the first time in a long time.”

“We’ve seen a lot of people come in as new patients saying, ‘I know I should have come in a long time ago, and I’ve just been putting it off.’ Many are middle-aged. They’ve been putting off chronic health conditions or screening tests or other things for years. We see people come in with diabetes or high blood pressure that’s out of control and within three months we get them to a point where everything’s in control, they’re feeling better, they have more energy, they’re feeling good about their health. We’ve maybe given them advice about diet and exercise and ways they can keep themselves healthy.”

More positive outcomes are prevalent across the healthcare spectrum.

“I would say overall the average patient is having a better experience and outcome now than they were five years ago,” Nebraska Methodist’s Jeff Francis said.

One World’s CEO, Andrea Skolkin, said, “We’ve been able to reach more people living on limited income so our services have been able to expand both in terms

of numbers of patients we care for as well as types of services and locations.” One World opened two new satellite clinics with help from ACA generated monies. “As we’ve opened new clinics we’ve seen a number of people that had never been seen or delayed being seen with very complex

medical and sometimes mental health issues – and it’s more costly. We grew from about nine or ten percent of patients with insurance to close to 15 per- cent. For newly insured patients it’s meant some peace of mind.”

Fewer insured people, Higher Costs

She and her community health center peers favor more afford- able coverage to increase the numbers of those insured.

Zetterman said high premiums and co-pays present obstacles that would be lessened if everybody got covered. “The financial burden on the individual patient and family for health- care right now is too high.”

DeBehnke said, “A lot of the

burdens of those premiums in terms of high deductibles and other things have been shifted to families. There has to be some degree of subsidization if we’re going to make this all work. Regardless of where we land with this, the financial burden on the individual patient and family for health- care right now is too high.”

For the poor, the last resort for care continues to be the ER.

“If you’re uninsured the one place you can go in this country is to the emergency room of a hospital because the laws say you cannot turn anyone away from there,” said Zetterman. “As a consequence the uninsured make use of the ER because it guarantees they’ll get cared for – at least at that moment. The ER is the most expensive place to go for things that could otherwise be handled in a healthcare office.”

Zetterman said America’s handling of its social contract and safety net means “we cost shift in the healthcare environment to pay for things.” “In Nebraska, where we didn’t expand Medicaid,” he said, “we cost shift from private insurance and healthcare providers to people who have private insurance. They help pay for the uninsured-underinsured. We’ve estimated that to be well over a billion dollars. We can’t control costs reliably until everybody is in the system with some kind of a paid healthcare benefit. That can include all the current federal and state programs as well as commercial insurance that’s out there.

“Once we no longer cost shift to pay for healthcare we can begin to address the questions where are we spending our money and why are we spending it in those areas. Then we have a chance to control the growth of healthcare costs.”

Skolkin said, “A lot of hands in the pot helps add to the cost. There’s a lot of system inefficiencies, particularly in billing and credentialing, that could be made a lot of easier. That would save resources.”

DeBhenke said, “As the healthcare industry, we have not been engaged to the degree we need to be to actually decrease overall cost of care because frankly from a pure financial standpoint it’s not been in our best interest. The health systems, providers and other organizations have to really get be- hind this whole idea of providing value, of decreasing overall total cost of care while improving outcomes for patients. That’s got to work in parallel with legislative and subsidization levels at the federal level.”

He said until there’s more buy-in from “young invincibles” – 20-somethings in good health – to broaden or balance the risk pool and thus reduce payouts, costs will be a problem.

“Certainly the pricing needs to be attractive to those individuals to broaden the pool. And frankly the benefits associated with products on the exchange need to be attractive so those individuals feel comfort- able and actually want to have coverage. Those least likely to go to the marketplace and buy individual health insurance plans are exactly the people we want to do that to broaden the pool. Healthy individuals that don’t utilize healthcare much soften the financial blow.”

Repeal Without replace is A mess, Why not repair?

The ACA’s meant adjustments from all healthcare stakeholders. Opponents have resisted it from the start and that fight continues. In early January the Republican-led Senate began reviewing ACA to try and garner enough votes to repeal it through the budgetary reconciliation legislative process.

“Unfortunately President Trump has focused on what he’s going to take away without have a plan in place,” said Kristine McVea, “I think that’s been harmful. There’s a lot of fear and uncertainty among our patients. These are people who struggled without health insurance who finally got a chance at taking care of their health and are now very afraid of the possibility that’s all going to be taken away. We hear this every day from people coming into the marketplace and coming into see us for care, I think the capricious statements made by this administration have fueled that.”

More recently, talk of flat-out repeal has given way to amend or modify in acknowledgment of the gains made under ACA and the difficulty of dismantling its far-reaching, interrelated tentacles, absent a ready-to-implement replacement. The political fallout of taking away or weaken- ing protection people have come to rely on would be severe.

“Once leadership has really started to

dig into what it would mean to repeal this outright and try to replace it they’re finding it is not a simple thing to do and the health and coverage of millions of people are at stake,” said James Goddard, an attorney with the public advocacy group Nebraska Appleseed. “So things are slowing down with the recognition they need to be careful with this, and of course they do.

“I think the change in the way it’s being discussed is a reflection of the reality that this is a dramatic thing you’re discussing altering and they need to do it the right way. Much of the ACA hangs together and one thing relies on another and if you start pulling pieces of it apart, you have the potential for the whole thing to fall down.”

Zetterman said he and fellow physicians favor a cautionary approach.

“Most of us would say the Affordable Care Act should be maintained and improved. There are dangers in taking it away and replacing it because it’s now in so many different places.”

Nebraska Appleseed attorney Molly McCleery said total repeal would affect many. “Initial Congressional Budget Office projections show 18 million people would lose coverage, and then in the out years, 32 million would lose coverage – both private and public. The Urban Institute’s state-by- state impact study found 200,000-plus Nebraskans with a pre-existing condition would be impacted if that consumer protection would be taken away.”

Jeff Francis said, “The new ‘r’ word I’m hearing is repair. The consensus seems to be to keep what’s popular and working and change what’s not.”

EDITOR’S NOTE: Details of the recently proposed GOP replacement had not been released as of this printing.

Daniel DeBehnke said of the current climate, “I think it’s extremely confusing because it’s complicated. It’s like a balloon – you poke in one area and something bulges out in another. I think people are frustrated, and rightly so, they pay a lot for healthcare. It’s not just as simple as I-pay- a-lot-for-my-healthcare, ACA is bad, let’s get rid of it.’ There are layers of complexity. We may not like exactly how things are funded or how some components are dealt with. We may not agree totally with all the tactics to get there, but at the end of the day we’ve got more people covered.

I don’t think anybody has the appetite to change that back.

“We just have to figure out how to incrementally lessen the financial burden while maintaining the real goal – more people covered and providing value for the money being spent.”

He said the best course of action now for providers is to “just take really good care of patents and decrease unnecessary utilization and duplication of services,” add- ing, “It’s what everybody wants anyway.”

Fixing the marketplace

Meanwhile, on the insurers’ side, some carriers have left public health exchanges after incurring major losses. This state’s largest healthcare insurer, Blue Cross Blue Shield, opted out of the volatile marketplace.

“Since we started selling on the ACA marketplace we’ve lost approximately $140 million,” executive vice president Steve Grandfield said. “We have a responsibility to all our members to remain stable and secure, and that responsibility was at risk

if we had continued to sustain losses. The public marketplace is unstable, which has driven increased costs and decreased com- petition and consumer choice. The higher premiums go, the more likely people, especially healthy people, drop their coverage. That means the majority of people remain- ing on ACA plans are sick, with increasingly higher claims, which drives premiums up even further.”

He cited instances of people gaming the system by buying plans when they need care, then dropping them when they longer need it.

Granfield said Blue Cross supports a well modulated ACA overhaul.

“It’s important to put in place a smooth transition. We would like to see regula- tory authority for insurance returned to the states, including rate review and benefit design and closing the coverage loopholes that lead to higher consumer costs.”

He has a long wish-list of other changes he wants made.

The leaders of two major Nebraska health provider systems say they haven’t seen any impact from the BCBS defection because there are many other insurers and products on the market. The executives were not surprised by the move given the fluid healthcare field.

Nebraska Methodist’s Jeff Francis said, “There were a lot of unknowns. I think it takes several years through the insurance cycle to be able to correct those kinds of unknowns, especially the way the federal government handles the bidding and setting of rates That’s why you won’t see craziness or changes in the rates in the years to come because they now have several years of experience with this new population and they’re then able to price accordingly.”

Daniel DeBehnke of Nebraska Medicine said, “Regardless of what happens in Washington, if the exchanges are kept in place there will be some changes made either in the pricing or pool that will help organizations like Blue Cross perhaps get back in that business.”

Quality Health Care Starts with Collaboration

Collaboration is key for containing costs in a system of competing interests. More U.S. healthcare decisions are happening outside silos.

Francis said, “A big change in the last 10 years is opportunities to work more collaboratively. In the past it would have been much more stand-alone. Now the hospitals and physicians are working more closely. Nebraska Methodist is part of an account- able care organization – Nebraska Health Network, along with Nebraska Medicine and Fremont Health. We recognize the importance of learning better practices from each other so we can pass that along to make healthcare better for the community and for employers paying for their employees insurance.”

One result, he said, is “less antibiotics pre- scribed by our family doctors at Nebraska Medicine and Methodist Physicians Clinic.”

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Mini-Profile

Author-journalist-blogger Leo Adam Biga resides in his hometown of Omaha, Nebraska. He writes newspaper-magazine stories about people, their passions, and their magnificent obsessions. He's the author of the books "Crossing Bridges: A Priest's Uplifting Life Among the Downtrodden," "Alexander Payne: His Journey in Film" (a compilation of his journalism about the acclaimed filmmaker) "Open Wide" a biography of Mark Manhart. Biga co-edited "Memories of the Jewish Midwest: Mom and Pop Grocery Stores." His popular blog, Leo Adam Biga's My Inside Stories at leoadambiga.com, is an online gallery of his work. The blog feeds into his Facebook page, My Inside Stories, as well as his Twitter, Google, LinkedIn, Tumblr, About.Me and other social media platform pages.